As many of you know,
$QUCY has decided to file a lawsuit against us.
We put the lawsuit in the Archives section of our website here:
whitediamondresearch.com/arc…
We offered to make peace with the company to avoid the lawsuit. We offered to never write about the company, or their CEO David Lazar, ever again.
However, to our surprise they refused! And they also published a PR about our offer, which was meant to be private.
So, we can make this a public affair then. We have no problem with that, it's a public company after all. We'll be tweeting our thoughts on interesting developments about the company/lawsuit.
Looking through the lawsuit, there are some statements in there that deserve a second look. A few of them are below:
It states:
"Almost immediately after
receiving QUCY's decision not to pursue fundraising, upon information and belief, Funder caused
QUCY's stock price to sharply decline amid a Iarge short position premised upon Funder's access
to non-public, material information about QUCY"
Wow! So basically, QUCY went to this "Funder" to try and get him to invest in QUCY. However, after the Funder was able to access "non-public, material info" on QUCY during the negotiations, he decided to short it!
I think both QUCY longs and shorts would like to know, what is this non-public, material info? When will it become public?
The lawsuit also states:
"Organic buying pressure
propelled QUCY's stock price from $0.32 to $3.56 an increase of more than 768% in
approximately one month."
Wouldn't just saying "buying pressure" be enough? Why do go out of their way use the word "organic"? As opposed to "artificial" or "inorganic" buying pressure?
We don't want to make any assumptions, we are in a lawsuit after all, but some interesting definitions come to mind:
Protesting too much — the best fit when someone goes out of their way to insist on something, making you suspect the opposite is true. From the phrase, “The lady doth protest too much.”
Overcompensation — they emphasize a claim to conceal or compensate for the opposite reality.
Preemptive denial — they deny something before anyone has accused or questioned them.
The lawsuit also states:
"White Diamond positions itself as an independent news and research agency,
advertising itself as "an Independent institutional-grade research focused on identifying
asymmetric risks in small and micro-cap equities.
White Diamond is anything but that. White Diamond is a market participant,
who hides at the bottom of a tertiary webpage the following: "As of the publication date of our
reports, White Diamond Research, along with its clients, affiliates, and related entities, may have a short position in the securities discussed..."
We're "anything but that"? So we're not independent? Are we "dependent" then? Or are independent companies not allowed to short? What would be the proper way to call ourselves? We have the disclaimer that we short the companies we talk about. I guess QUCY doesn't think that's enough.
The lawsuit states:
"hatchet-job "research' is taken
for legitimate market analysis."
This is a strong opinion by the company. If they were to look at our history, we have about a 90% success rate. We list all of our past reports on our website in plain site, and show the price of the stock the day before we published, and the price of the stock now. Many of the stocks we published bearish reports on are down 95%+. And our bullish report stocks have done well too overall. We do deep due diligence on stocks, and report our diligence. Otherwise, we wouldn't have the long-term results that we have.
The lawsuit states:
"These statements were false, defamatory and designed for the sole malicious
purpose of depressing QUCY's share price."
However, the company doesn't explain why our statements are false. That's not enough in a court of law in the US. The accusing party needs to PROVE their accusations.
More to come!